Question

Allowed intrest on capital rupess 700 in which it added

Answer 1

Answer:

Interest on capital

Interest on capitalThe journal entry is as follows:

Interest on capitalThe journal entry is as follows:

Interest on capital a/c_____dr

Interest on capitalThe journal entry is as follows:

Interest on capital a/c_____dr

To capital a/c

Explanation:

Interest on capital is an expenditure for business as interest is to be paid to owner and is nominal a/c so debited

Interest on capital is an expenditure for business as interest is to be paid to owner and is nominal a/c so debitedCapital is liability of business towards owner and is increased due to interest payment so credited.